Bill includes both the BLS CPI number and the Cleveland Fed's median cpi and trimmed mean cpi (alternative measures of core inflation). Key take away is
"On a year-over-year basis, these measures of inflation are increasing, and are near the Fed's target."
Adding new variation to the preceding CPI charts, the Calculated Risk cpi chart covers the almost 22 year period from January 1990. All three representations of core inflation are tracking close to each other over the past year but have shown larger differences in the past.
Update: 20 September 2011
From this chart, the uptick over the past year for all three measures looks quite sharp and of course we cannot tell what it will do next.
On the other hand, this 21+ year view also shows a clear downtrend in all three measures.which doesn't add up with my personal feelings about actual changes in inflation over that period of time. Remember from one of our previous charts, when we look at Headline CPI, we do not see a similar downward slope.
Of course, none of these measures directly shows the longer term cumulative impacts inflation and all three rule out aspects of inflation that actually impact ordinary citizens to end up with values that surely seem to be less than what American households really experiencing. My view is that these specialized metrics are at best a distraction from the main event: the cumulative inflation impact on each separate interesting sub-component of cpi. .
- A year over year view from the BLS news release showing just the past 12 months for just headline CPI
- An almost 12 year view of year over year inflation from Doug Short showing both headline and core cpi
- An almost 22 year view of year over year inflation from Calculated Risk showing three different metrics that reflect core inflation
- A 54+ year view of year over year inflation from Doug Short showing both headline and core cpi metrics
- The cumulative effect of inflation since the year 2000 broken down by categories such as energy, health care, and college tuition.
What do you see?
What else do we need to look at?
How else must we transform the underlying CPI metrics to reveal even more important insights?
And recalling a recent post (Creating the context for successful analyses), what's the context for looking at this data in the first place. One place to start might be to take a look at the interesting link to the Cleveland Fed that Bill McBride provided in his post: Measuring Inflation.